History  and  Description 


of 


Property  and  Securities 

of 


The  United  Railways  and  Electric  Co. 
of  Baltimore 


April  21st,  1913. 


OFFICERS. 


William  A.  House, 

President. 

Frank  A.  Furst, 

Vice-President. 


Thomas  A.  Cross, 

Second  Vice-President 
and  General  Manager. 

William  Early, 


Secretary. 

John  T.  Staub, 

Acting  Treasurer. 
N.  E.  Stubbs, 


Auditor. 

Joseph  C.  France, 

General  Counsel. 


DIRECTORS. 

H.  Crawford  Black, 
Alexander  Brown, 

Frank  A.  Furst, 

B.  Howell  Griswold,  Jr., 
William  A.  House, 
George  C.  Jenkins, 
Seymour  Mandelbaum, 
Henry  A.  Orrick, 

John  B.  Ramsay, 

Douglas  H.  Thomas, 
Francis  E,  Waters. 


ALEXANDER  BROWN  &  SONS,  Fiscal  Agents. 


Copyright  1913 
by 

Alex.  Brown  &  Sons 


K  X  |  A.V 

FORMED  BY  CONSOLIDATION. 

The  Company  was  formed  by  Articles  of  Agreement 
of  Consolidation,  dated  March  4th,  1  899,  which  resulted 
in  a  combination  of  all  the  street  railway  lines  in  Balti¬ 
more  and  vicinity  into  a  single  system.  The  authorized 
capitalization  of  the  new  Company  was  as  follows: 

First  Consolidated  Mortgage  4  Per  Cent.  Gold  Bonds.  $38,000,000 


Four  Per  Cent.  Cumulative  Preferred  Stock .  14,000,000 

Common  Stock .  24,000,000 


At  the  time  of  the  consolidation, 
1st  Consol.  4s.  $18,000,000  of  the  First  Consolidated 

4  Per  Cent.  Bonds  were  sold  and  the 
proceeds  used  as  part  payment  for  the  Baltimore  City 
Passenger  Railway  Company  and  the  Baltimore  Consoli¬ 
dated  Railway  Company;  $15,366,000  were  reserved  to 
retire  bonds  of  the  constituent  companies  and  $4,634,000 
for  betterments,  extensions,  expenses  of  the  consolidation, 
etc.  For  bonds  issued  since  consolidation,  see  post 
page  25. 

The  whole  of  the  $14,000,000  of 
Preferred  Stock  Preferred  Stock  was  sold  and  proceeds 
and  Income  used  as  part  payment  for  the  above 

Bonds.  companies.  Shortly  after  the  consoli¬ 

dation,  it  was  deemed  advisable  to  issue 
4  Per  Cent.  Income  Bonds  and  offer  them  in  exchange  for 
Preferred  Stock.  Practically  all  Preferred  stockholders 
accepted  the  offer. 

Of  the  $24,000,000  authorized 
Common  Stock.  Common  Stock,  $13,000,000  was 
issued  at  the  time  of  the  consolida¬ 
tion  and  $  1  1 ,000,000  was  reserved.  Of  the  $  1  3,000,000 
Common  Stock  so  issued,  $8,762,500  was,  according  to 


Page  Three 


the  Articles  of  Consolidation,  used  as  part  payment  for 
the  Capital  Stock  of  the  Company  first  formed  by  the 
consolidation  of  the  Baltimore  City  Passenger  Railway 
Company  and  Baltimore  and  Northern  Electric  Railway 
Company,  and  $4,237,500  as  part  payment  for  the  Balti¬ 
more  Consolidated  Railway  Company.  After  the  con¬ 
solidation,  $2,000,000  more  Common  Stock  was  issued 
to  acquire  all  the  then  existing  Electric  Light  Companies 
of  Baltimore,  which  companies  were  subsequently  sold 
for  cash.  For  stock  subsequently  issued,  see  post  page  28. 

The  First  Consolidated  4s  and  the  Preferred  and  Com¬ 
mon  stocks  were  the  only  securities  issued  at  the  time  of 
the  consolidation.  For  further  data  concerning  these 
issues  and  for  information  concerning  underlying  bonds 
and  securities  issued  since  the  consolidation,  see  post 
pages  24  to  38. 


Page  Four 


HISTORY  OF  THE  COMPANY. 


The  Company  in  its  early  history  was  hampered  by  the 
Free  Transfer  Act,  passed  immediately  after  the  consoli¬ 
dation,  also  by  the  great  Baltimore  fire  of  1904. 

The  consolidation  took  place  in  1 899.  The  City 
Charter  of  1  898  provided  for  a  five-cent  car  fare  with 
a  charge  of  three  cents  for  transfers.  About  a  year  after 
the  consolidation,  i.  e.,  April  5,  1900,  the  Legislature  of 
Maryland  passed  a  law,  to  take  effect  July  1,  1900, 
authorizing  the  Company  to  charge  five  cents  for  passen¬ 
gers  over  twelve  years  and  three  cents  for  children 
between  the  ages  of  four  and  twelve,  provided,  however, 
the  Company  should  give  free  transfers  throughout  the 
city.  It  was  generally  understood  that  this  was  a  com¬ 
promise  measure  passed  in  lieu  of  the  many  antagonistic 
bills  aimed  at  the  Company  at  this  session.  While  it  was 
deemed  advisable  by  the  Company  to  accept  this  legis¬ 
lation,  it  resulted  in  a  universal  transfer  system  which 
caused  a  material  reduction  from  the  estimated  gross  and 
net  receipts  of  the  Company. 

In  the  great  fire  of  February  7th  and  8th,  1904,  the 
Company  was  one  of  the  chief  sufferers.  The  loss  from 
property  destroyed  was  not  great  and  was  largely  covered 
by  insurance,  but  the  indirect  loss  in  gross  and  net  receipts 
was  considerable  for  the  year  1904.  In  June,  1904,  the 
Company  passed  the  interest  on  its  Income  Bonds  and 
adopted  a  plan  of  rehabilitating  the  property,  not  alone 
where  it  had  been  affected  by  the  fire,  but  with  the  pur¬ 
pose  of  making  the  system  one  of  the  best  in  the  country. 

The  street  railway  systems  of  the  city  at  the  time  of  the 
consolidation  were  in  fairly  good  physical  condition,  but 


Page  Five 


the  years  following  witnessed  remarkable  developments 
and  improvements  in  rapid  transit  facilities.  New  motor 
inventions  made  much  larger  cars  available.  The  econo¬ 
mies  of  improved  machinery  justified  the  discarding 
of  but  half-worn  equipment.  Cars  of  greater  capacity 
enabled  the  companies  to  relieve  to  some  extent  the 
rush-hour  traffic,  but  these  cars  in  turn  required  the  laying 
of  new  and  heavier  rails  and  practically  the  rebuilding  of 
old  power-houses  and  the  erection  of  new  ones. 

In  order  to  provide  funds  for  its 
Financial  Plan  elaborate  plan  for  the  rehabilitation  of 
of  1906.  the  system  for  improvements,  exten¬ 

sions,  etc.,  the  Company  adopted  a 
financial  plan  in  1906.  (For  Statement  of  Financial 
Plan  of  1906,  see  Commercial  and  Financial  Chronicle, 
Vol.  83,  page  156.)  This  plan  was  divided  into  two 
parts: 

(a)  IMPROVEMENT  OF  EXISTING  PROPERTY.— 
For  Track  Reconstruction  and  Repair,  Improvements  to 
Power  Houses  and  for  the  General  Improvement  and 
Betterment  of  Property  covered  by  the  Mortgages  of  the 
United  Company,  the  United  Company  was  to  use  so 
much  of  its  income  as  might  be  needed  up  to  and  includ¬ 
ing  the  year  1910.  The  Income  Bonds  Coupons  from 
1904  to  1910,  inclusive,  were  funded  by  the  issuance  at 
par  of  Thirty-Year  5  Per  Cent.  Funding  Bonds. 

The  holders  of  $13,842,000  out  of  a  total  of  $13,- 
976,000  of  Income  Bonds  availed  themselves  of  this  offer 
and  deposited  their  bonds  under  the  plan.  The  surplus 
income  over  and  above  interest  on  first  mortgage  and 
underlying  bonds  was  thus  made  available  (under  the 
funding  plan)  for  improvements,  betterments,  etc.,  dur¬ 
ing  the  period  mentioned. 


Page  Six 


This  surplus,  exclusive  of  Extraordinary  Expenditure 
Account  and  Depreciation  Charge,  increased  from 

$1,001,298.58  in  1906  to  $1,703,713.14  in  1912. 

(b)  ACQUISITION  OF  NEW  PROPERTY.— For 

new  property,  such  as  terminal  stations,  car  houses,  equip¬ 
ment,  extensions,  excursion  resorts,  etc.,  the  United  Com¬ 
pany  entered  into  a  contract  with  The  Maryland  Electric 
Railways  Company  whereby  the  latter  agreed  to  furnish 
funds  for  the  purchase  and  construction  of  such  property 
as  The  United  Company  might  require,  which  was  leased 
to  the  United  Company  at  a  rental  of  6  per  cent,  per 
annum  on  the  cost  of  property.  The  Maryland  Electric 
Railways  Company  has  issued  bonds  which  are  a  first 
lien  upon  this  property  and  the  United  Company,  by  its 
rental  agreement,  pays  a  sum  sufficient  to  cover  the 
interest  on  The  Maryland  Electric  Railways  Company 
bonds  and  to  create  a  sinking  fund.  The  United  Com¬ 
pany  obligates  itself  to  purchase  the  property  at  maturity 
for  an  amount  sufficient  to  pay  off  all  outstanding  bonds. 

The  Plan  of  1906  worked  out  most 
Effect  of  the  successfully.  By  the  end  of  1910  the 
Plan  of  1906.  physical  condition  of  the  property  was 
excellent.  The  President’s  Report  for 
1910  contained  the  following  statement: 

“The  property,  as  a  result  of  these  expendi¬ 
tures,  is  in  excellent  physical  condition — prob¬ 
ably,  on  the  whole,  better  than  that  of  any 
street  railway  in  the  country.” 

“The  financial  plan  of  1906  is  consummated. 

The  Company  itself  has  a  clean  balance  sheet 
and  has  no  bills  payable  or  accounts  payable, 
except  current  monthly  accounts.” 


Page  Seven 


The  Company  resumed  payment  of  interest  on  its 
Income  Bonds  in  1911  and  in  1912  paid  the  first  divi¬ 
dend  on  its  common  stock.  The  Report  for  that  year 
shows  earnings  on  Income  Bonds  (prior  to  depreciation 
charges)  amounting  to  nearly  three  times  the  Income 
Bond  interest,  and  after  deduction  of  depreciation,  to 
about  twice  the  Income  Bond  interest. 

The  Company’s  Report  for  1912  further  says: 

“The  Company  has  no  floating  debt.  As  of 
December  3 1  it  had  cash  on  hand  amounting 
to  $485,595.39.  The  Company  also  had  in 
its  treasury  $450,000  notes  of  the  Baltimore, 
Sparrows  Point  and  Chesapeake  Railway  Com¬ 
pany  and  $100,000  Notes  of  the  Baltimore, 
Halethorpe  and  Elkridge  Railway  Company, 
representing  in  part  the  construction  cost 
of  those  properties.  It  also  had  unpledged 
$889,000  of  its  First  Consolidated  Mortgage 
4  Per  Cent.  Bonds.” 

The  Report  for  1912  also  says: 

“It  will  be  noted  that  after  deducting  Oper¬ 
ating  Expenses,  Taxes,  Interest,  Rentals,  Depre¬ 
ciation,  etc.,  $677,082.32  was  left  available  for 
dividends.  This  is  at  the  rate  of  A/i  per  cent, 
on  the  $15,000,000  of  Common  Stock  out¬ 
standing  January  1,  1912,  which  amount,  how¬ 
ever,  increased  during  the  year  owing  to  the 
conversion  of  Notes  into  Common  Stock.  The 
Board  of  Directors  did  not  distribute  this  full 
amount  to  Stockholders,  but  in  furtherance  of 
its  conservative  dividend  policy  declared  in 
April,  1912,  a  dividend  of  75  cents  per  share — 


Page  Eight 


the  first  dividend  ever  paid  on  the  Common 
Stock — and  in  October  another  dividend  of  75 
cents  per  share.” 

On  April  9,  1913,  the  Company  declared  its  third 
dividend  on  its  Common  Stock,  amounting  to  $1.00  per 
share,  or  2  per  cent.  This  is  regarded  as  a  semi-annual 
dividend.  It  has  been  stated  that  the  Company  will  take 
up  later  the  question  of  quarterly  dividends. 


THE  COMPANY’S  EARNINGS. 

GROWTH  IN  EARNINGS.— For 
Comparative  a  detailed  comparative  statement  of 
Earnings.  Annual  Earnings  from  1906-1912,  in¬ 

clusive,  see  Appendix  I. 

Omitting  the  year  1904  (the  year  of  the  fire)  and  the 
year  1  908  (the  year  of  the  industrial  depression  following 
the  panic  of  1907)  the  Company’s  increase  in  gross 
receipts  since  the  consolidation  has  averaged  7. 1 6  per 
cent,  per  annum. 

The  following  figures  give  further  indication  of  the 
growth  of  the  Company  since  the  consolidation.  Com¬ 
paring  the  year  1900 — the  first  full  year  of  operation 
after  the  consolidation — with  the  year  1912,  we  note: 


Gross  Increase, 
93  Per  Cent. 


Net  Increase, 
£8  Per  Cent. 


1 .  That  gross  receipts  of  the  Company  from 
Railway  properties  increased  in  that 
period  from  $4,431,742.96  to  $8,577,- 
004.06,  or  over  93  per  cent.; 

2.  That  net  receipts  increased  from  $2,372,- 
183.90  to  $4,708,128.11,  or  over  98 
per  cent. 


Pace  Nine 


3.  Interest  on  bonds,  equipment  and  other 
rentals  (including  Maryland  Electric 
Railways  Company  bonds  and  sinking 
fund,  interest  on  new  Funding  Bonds 
and  Three-Year  Notes)  increased  from 

$1,477,490.78  to  $2,206,430.10,  or 
about  49  per  cent. 

Park  and  other  taxes  increased  from 

Tax  Increase,  $380,489.35  in  1900  to  $796,075.84 
109  Per  Cent.  in  1912,  or  about  109  per  cent.  If 
we  include  payments  for  public  require¬ 
ments,  such  as  regrading,  repairing  streets,  payments  in 
the  nature  of  taxes  amounted  in  1912  to  $992,396.67. 
There  are  certain  factors  in  this  latter  item  which  are 
uncertain  in  character  and  may  or  may  not  be  permanent, 
as  they  are  due  to  Municipal  Improvements  now  under 
way,  such  as  widening,  regrading  and  paving  of  streets 
and  construction  of  new  sewerage  system. 

The  following  comparison  of  earnings,  1  906  and  1912, 
is  also  suggestive.  It  is  based  on  earnings  in  1906  (when 
the  financial  plan  for  the  rehabilitation  of  the  property 
was  adopted)  compared  with  those  of  1912: 

1.  Gross  Receipts,  1912,  $8,5  77,004.06;  1906,  $6,587,827.51. 
Increase,  30.2  per  cent. 

2.  Net  Earnings,  1912,  $4,708,128.11;  1906,  $3,366,885.24. 
Increase,  39.8  per  cent. 

3.  Surplus  over  Fixed  Charges,  Taxes,  Interest,  etc.  (not  including 
income  bonds)  1912,  $1,703,713.14;  1906,  $1,001,298.58. 
Increase,  70.1  per  cent. 

From  the  above  comparison  it  is  evident  that  the  policy 
of  the  Board  in  authorizing  large  expenditures  to  be 
made  upon  the  property  has  justified  and  is  now  justify¬ 
ing  itself.  It  is  also  evident  that  the  financial  plan  of 
1906  has  worked  out  very  successfully. 


Interest  Increase, 
49  Per  Cent. 


Page  Ten 


FRANCHISES. 


FRANCHISES. — The  United  Company  now  operates 
403.3  miles  of  main  line.  Counsel  advise  that  all  of  the 
Company’s  franchises  in  the  streets  of  the  city  are  per¬ 
petual  with  the  exceptions  noted  below.  About  fifteen 
miles  of  disconnected  franchises  granted  since  the  new 
city  Charter  (1898),  while  not  perpetual  in  terms,  are 
for  twenty-five  years,  renewable  for  twenty-five  more  at 
a  fair  valuation.  The  franchises  granted  to  the  Balti¬ 
more  City  Passenger  Railway  Company — fifty-six  miles — 
and  the  Citizens  Railway  Company — thirteen  miles — 
were  subject  to  charter  provisions,  giving  the  right  to 
the  city  every  fifteen  years  to  purchase  these  particular 
properties,  but  only  upon  payment  of  the  value  of  all  its 
property  and  franchises.  These  rights  mature  eight  years 
apart,  and  it  will  be  noted  that  they  represent  a  very 
small  portion  of  the  whole  system.  Even  if  it  were 
practicable  for  the  city  to  purchase  and  operate  discon¬ 
nected  lines  with  separate  power  facilities,  the  security 
holders  are  amply  protected,  as  the  city  can  only  do  so 
upon  payment  of  the  value  of  the  franchises,  as  well  as 
the  value  of  the  property  so  acquired.  There  has  been 
no  agitation  for  Municipal  Ownership  in  Baltimore,  as  the 
city  has  an  exceptionally  advantageous  arrangement  with 
the  Company,  receiving  in  addition  to  regular  taxes,  9 
per  cent,  of  the  gross  receipts  within  city  limits.  This  is 
known  as  the  Park  Tax. 


IMPROVEMENTS  TO  PROPERTY. 

It  may  be  interesting  to  summarize 
Summary  of  the  improvements  to  the  property  since 
Improvements.  the  consolidation. 


Page  Eleven 


In  1899  the  Company  operated  353 
Trackage.  miles  of  single  track;  today  it  operates 

over  403  miles.  Of  this,  236  miles 
are  in  the  city,  1  04  miles  of  which  have  been  entirely 
reconstructed  with  nine-  and  seven-inch  girder  rail  of  the 
most  improved  pattern.  About  200  miles  of  city  lines 
have  been  either  cast-  or  electric-welded.  All  of  the  1  7 1 
miles  of  T-rail  on  suburban  lines  are  reported  as  in  good 
condition. 

Since  the  consolidation,  nearly  all 
Equipment.  the  smaller  cars  in  use  at  that  time  have 

been  discarded  and  the  Company’s 
equipment  today  is  largely  of  the  most  modern  J.  G. 
Brill  &  Co.  double-truck,  semi-convertible  type,  equipped 
with  air  brakes  and  with  multiple  control  on  high-speed 
cars. 

At  the  time  of  the  consolidation  the 
Power  Houses.  Company’s  power  house  capacity  was 
1  1,979  kw. ;  today  it  has  a  modern, 
thoroughly  equipped  central  power  house  with  normal 
generating  capacity  of  37,300  kw.,  and  operates  five  sub¬ 
stations,  three  of  which  are  practically  new,  with  32,000 
kw.  capacity. 


The  following  is  an  extract  from  the 
Power  Contract.  Report  of  the  Company  for  1911; 

"SUSQUEHANNA  RIVER  POWER.— On  February 
8,  191  1,  an  agreement  was  entered  into  between  your 
Company  and  the  Pennsylvania  Water  and  Power 
Company,  covering  the  furnishing  by  the  latter  Com¬ 
pany  of  hydro-electric  energy.  The  agreement  runs 
for  a  period  of  fifteen  years,  with  the  right  reserved 
to  your  Company  to  terminate  it  at  the  end  of  either 
five  or  ten  years.  Under  this  contract,  the  Power 
Company  began  furnishing  current  on  July  17,  1911. 

*  *  * 


Page  Twelve 


“Operations  at  the  Pratt  street  plant  have  not  been 
entirely  discontinued,  but  the  river  power  is  utilized  in 
conjunction  with  the  steam  generated  power  at  Pratt 
street,  this  latter  station  being  always  available  for 
any  emergency  that  may  arise.” 

At  the  present  time  the  Company’s  power  requirements 
are  to  a  large  extent  supplied  by  power  generated  on  the 
Susquehanna  River,  supplemented  by  steam  power  gen¬ 
erated  at  its  own  plants,  which  are  maintained  in  a  high 
state  of  efficiency  in  order  to  be  prepared  for  immediate 
service  in  the  event  of  a  serious  interruption  of  hydro¬ 
energy. 

The  advantage  derived  from  the  utilization  of  river 
power  is  not  only  in  the  saving  of  cost  of  current,  includ¬ 
ing  charges  for  depreciation  of  power  plants,  but  in  the 
large  capital  outlays  which  would  otherwise  be  necessary 
for  the  acquisition  of  new  machinery. 

The  car  house  capacity  has  been  in- 
Car  Houses.  creased  66.6  per  cent,  since  consolida¬ 

tion  and  since  1904  the  Company  itself 
has  erected,  or  has  leased  from  The  Maryland  Electric 
Railways  Company,  eight  barns  of  the  most  approved 
concrete  construction.  The  annual  report  of  1907  says 
of  these  houses: 

“They  are  models  of  completeness  in  respect  to  the 
housing  of  the  Company’s  valuable  equipment,  and 
providing  of  comfortable  quarters  for  employees  and 
waiting  rooms  for  passengers.  The  fire  hazard  has 
been  reduced  to  a  minimum,  all  material  of  an  inflam¬ 
mable  character  having,  as  far  as  practicable,  been 
eliminated  in  their  construction.” 


CAPITAL  EXPENDITURES. 

It  will  thus  be  seen  that  the  United  Company’s  system 
has  been  practically  built  over  since  the  consolidation. 


Page  Thirteen 


This  has  required  large  capital  expenditures,  costing  from 
the  date  of  consolidation  to  December  31,  1912,  over 
$19,300,000,  as  follows: 

Capital  Expenditures  from  Income  and  proceeds 


sales  First  Consol.  4s .  $7,892,063.72 

“Extraordinary  Expenditure  Account,”  taken  from 

Income,  etc .  5,350,650.11 

Maryland  Electric  Railways  Company  bond  pro¬ 
ceeds  and  Special  Sinking  Fund .  4,186,944.81 

Car  Trusts .  1,906,211.70 


Total . $19,335,870.34 


NOTE. — In  the  “Extraordinary  Expenditure  Account,”  which 
was  an  account  kept  for  the  purpose  of  determining  the  exact  cost 
of  rehabilitating  the  property,  are  some  items  which  may  properly 
be  charged  to  Maintenance  and  Repair;  the  balance  represents 
capital  expenditures  for  new  property,  improvements,  etc. 


Notwithstanding  this  heavy  expenditure  for  rehabilita¬ 
tion  the  total  interest  charges  (including  rentals)  had  only 
increased  by  December  31,  1912,  $668,939.32  over  the 
year  1900,  or  at  the  rate  of  3.4  per  cent,  on  the  above 
expenditures,  which  indicates  satisfactory  financing. 


COMPARATIVE  CAPITALIZATION  OF  THE  UNITED 
RAILWAYS  AND  ELECTRIC  COMPANY  OF  BAL¬ 
TIMORE  WITH  RAILWAYS  IN  OTHER  CITIES. 

The  report  of  the  United  States 
Comparative  Census  Bureau  on  Street  and  Electric 
Capitalization.  Railways  (1902)*  shows  the  following 
net  capital  liabilities  (bonds  and  stock) 
per  mile  of  surface  lines  in  all  cities  of  over  500,000 
population. 


Page  Fourteen 


Population,  Capital  Liabilities, 


City.  1910.  Per  Mile. 

New  York .  4,766,883  $259,542 

Chicago! .  2,185,283  218,864 

St.  Louis .  687,029  198,647 

Pittsburgh .  533,905  185,170 

Baltimore .  558,485  182,009 

Philadelphia  .  1,549,008  165,085 

Boston  .  670,585  97,353 


*The  only  later  report  (1907)  recapitulates  the  per  mile  capi¬ 
talization  by  States  and  geographic  divisions,  but  not  by  cities. 

fThese  figures  are  based  upon  the  1913  records  for  the 
Chicago  Railways  Company  and  the  Chicago  City  Railway 
Company. 


It  will  be  seen  from  the  above  table  that  the  capital 
liabilities  per  mile  of  The  United  (Railways  and  Electric) 
Company  (of  Baltimore)  was  at  the  time  of  the  Census 
Report  lower  than  that  of  the  principal  surface  lines  in 
all  of  these  cities  save  two. 

NOTE. — Considerable  changes  have  taken  place  in  the  past 
ten  years  in  all  of  the  properties,  but  as  the  (Baltimore)  United 
Company  has  been  carefully  financed  during  this  period,  it  is 
probably  safe  to  assume  that  the  relative  proportions  are  fairly 
accurate. 


In  estimating  the  “bonded  debt”  per  mile  of  The  United 
(Railways  and  Electric)  Company,  the  $14,000,000  of 
Income  Bonds  are  generally  included  as  a  “debt.”  This, 
however,  creates  an  erroneous  impression.  These  bonds 
should  be  regarded  as  they  were  originally  intended  and 
designed  to  be  regarded,  in  the  nature  of  preferred  stock, 
for  which  they  were  actually  exchanged.  The  interest 
on  these  bonds  is  payable  not  as  a  debt,  but  only  if  and 
when  earned.  The  principal  does  not  mature  unless 
there  is  a  default  upon  underlying  bonds.  If  this  be 


Page  Fifteen 


taken  into  consideration,  a  more  accurate  idea  of  the 
situation  is  obtained.  Deducting  $14,000,000  of  Income 
Bonds  reduces  the  “bonded  debt”  of  the  United  Com¬ 
pany,  as  frequently  given  in  publications,  by  about 
$38,000  per  mile. 


THE  IMPROVEMENT  IN  THE  ACTUAL  SECURITY 
OF  THE  BONDS  AND  STOCK  OF  THE  UNITED 
RAILWAYS  AND  ELECTRIC  COMPANY  OF  BAL¬ 
TIMORE  SINCE  THEIR  ORIGINAL  ISSUE. 

FIRST  CONSOLIDATED  MORT- 
1st  Consol.  4s.  GAGE  4s. — The  First  Consolidated  4s 
are  now  an  absolute  first  lien  on  182 
1st  Mortgage  miles  of  track.  In  November,  1911, 

on  182  Miles  the  United  Company  retired  $2,000,000 

of  Track.  Baltimore  City  Passenger  Railway  Com¬ 

pany  First  Mortgage  3s  and  $500,000 
Baltimore  City  Passenger  Railway  Company  4  J/2  Per 
Cent.  Certificates  of  Indebtedness.  In  1912  the  Company 
retired  $250,000  Central  Railway  Company  First  Mort¬ 
gage  6s.  The  mortgages  and  indentures  securing  the 
above  bonds  and  certificates  have  been  canceled  and 
the  properties  released.  In  addition  to  the  above  track¬ 
age  the  bonds  are  also  a  lien  upon  all  of  the  property  of 
the  Company  now  owned  or  hereafter  to  be  acquired 
subject  to  $9,050,000  underlying  bonds. 

But  the  most  noteworthy  evidence 
Earnings  of  their  improvement  in  substantial 

Applicable.  security  and  value  is  the  fact  that  the 

gross  and  net  receipts  of  the  United 
Company,  since  the  consolidation,  have  nearly  doubled. 
The  bonds  were  issued  in  1  899.  In  1  900  the  Company’s 


Page  Sixteen 


net  earnings  available  for  taxes  and  fixed  charges,  were 

$2,372,183.90  and  in  1912  they  were  $4,708, 1  28. 1  1  — 
an  increase  of  $2,335,944.21.  On  the  other  hand,  the 
interest  charges  and  sinking  fund  of  the  Company  only 
increased  $728,939.32  during  this  period. 

The  surplus  for  many  years  went 
Improvement  back  into  the  property  and  increased 

of  Security  the  security  of  the  first  mortgage  bonds 

from  Income.  without  placing  any  additional  lien 
ahead  of  them.  Thus,  for  six  years — 
1904  to  1910,  inclusive — substantially  the  total  income 
of  the  United  Company,  over  and  above  the  fixed 
charges,  was  applied  to  improvement  of  the  property. 
Even  the  income  bond  interest  during  this  period  was 
funded  and  the  cash  spent  upon  the  property. 

THE  MARKET  VALUE  OF  THE 
Market  Value.  FIRST  CONSOLIDATED  FOUR  PER 
CENT.  BONDS. — While  investors  who 
receive  a  regular  return  on  their  investments  do  not,  as  a 
rule,  concern  themselves  as  to  market  quotations,  we  have 
been  asked  by  a  number  of  those  who  have  traded  in  the 
bonds  why  it  is  that  their  market  price  is  considerably 
lower  than  at  the  date  of  their  issuance,  in  view  of  the 
very  material  improvement  in  the  substantial  value  of  the 
bonds.  The  security  has  been  strengthened  each  year; 
the  surplus  applicable  to  interest  and  taxes  has  nearly 
doubled;  the  property  was  never  in  better  condition  and 
yet  the  market  value  of  the  bonds  is  lower. 

Overlooking  the  purely  local  influence,  such  as  the  tax 
burden  which  reflects  sympathetically  upon  all  the  United 
Company’s  securities,  it  is  also  true  that  high-grade  bonds 
everywhere  are  selling  at  lower  figures  than  those  pre¬ 
vailing  at  the  time  of  the  issuance  of  these  bonds. 


Page  Seventeen 


It  was  very  generally  thought  by  economists  in  1899, 
the  date  of  the  issuance  of  these  bonds,  that  this  country 
would  go  permanently  on  a  3(4  per  cent,  interest  basis 
for  high-grade  investments.  Since  that  date,  however, 
largely  due  to  the  discoveries  of  gold,  the  interest  return 
upon  these  securities  has  been  materially  increased  by  the 
decline  in  market  prices. 


INCOME  BONDS. 

The  Income  Bonds  have  been  bene- 
Income  Bonds.  fited  in  security  to  the  same  extent  as 
the  First  Consolidated  4s,  as  they  are 
a  lien  upon  all  the  property  covered  by  the  First  Consoli¬ 
dated  4s. 

The  interest  on  these  bonds  was  funded  from  1904  to 
1910.  Payment  of  interest  was  resumed  in  1911.  The 
interest  on  these  bonds  and  dividends  on  a  small  amount 
of  preferred  stock  amounts  to  $560,000  annually.  After 
payment  of  operating  expenses,  taxes  and  fixed  charges, 
the  Company  earned  in  1911,  $1,427,618.85.  This  was 
distributed  as  follows:  $450,944.11  to  Extraordinary 
Expenditure  Account;  $560,000  to  holders  of  Income 
Bonds  and  Preferred  Stock  and  $416,674.74  to  Profit 
and  Loss. 

In  1912  the  United  Company  earned  $1,703,713.14 
after  payment  of  operating  expenses,  fixed  charges  and 
taxes,  or  more  than  three  times  the  interest  on  the  bonds. 
After  allowing  for  depreciation,  the  United  Company  was 
still  able  to  show  about  twice  the  interest  on  the  Income 
Bonds. 

NOTE. — Any  comparison  in  detail  of  Annual  Statements  of  The 
United  Company  prior  to  1910  must  be  made  with  care,  as  the 
Company  during  those  years  was  passing  through  a  period  of 


Page  Eighteen 


extraordinary  expenditures,  requiring  new  financing  and  the  use 
of  all  available  income.  There  is,  therefore,  no  accurate  standard 
of  comparison,  and  in  examining  the  results  of  any  that  may  be 
made  it  should  be  borne  in  mind  that  while  the  extraordinary 
expenditure  account  (opened  by  the  Company  at  the  time  of  the 
adoption  of  its  funding  plan,  in  order  to  determine  accurately  the 
cost  of  rehabilitating  the  property),  includes  items  representing 
large  capital  expenditures,  such  as  principal  payments  due  on 
Car  Trusts,  it  also  includes  items  that  in  the  absence  of  such  an 
account  might  ordinarily  be  charged  to  “Maintenance  and  Repair." 


COMMON  STOCK. 

It  is  evident  that  all  the  extensive 
Common  Stock,  improvements  to  the  property  were 
made  at  the  expense  of  the  common 
stockholder,  no  dividends  having  been  paid  until  1912. 
For  many  years  the  whole  of  the  Company’s  surplus  was 
turned  back  into  the  property.  The  common  stockholder 
naturally  looks  to  the  results  of  these  expenditures  for  his 
return.  The  Company  declared  dividends  in  1912  equal 
tc  3  per  cent,  on  its  capital  stock  and  in  April,  1913, 
$1.00  per  share  was  declared,  which  is  at  the  rate  of  4 
per  cent,  per  annum.  The  Directors  stated  in  this  con¬ 
nection  that  they  had  under  consideration  the  advisa¬ 
bility  of  establishing  quarterly  rather  than  semi-annual 
dividends. 

The  Company’s  growth  has  been  consistent  and  steady. 
The  amount  of  its  common  stock,  comparatively  speak¬ 
ing,  is  not  great,  so  that  gradual  increases  in  dividends  do 
not  require  very  heavy  distributions  of  cash. 

With  the  history  of  the  Company  and  its  comparative 
earnings  before  him  one  stockholder  may  figure  as  well 
as  another  the  prospect  of  increasing  dividends.  It 
should  not  be  forgotten  on  the  one  hand  that  the  gross 


Page  Nineteen 


earnings  of  street  railway  companies  progress  with  regu¬ 
larity,  and  on  the  other  that  there  are  many  incidents  to 
interfere  with  precise  estimates  as  to  net  receipts. 

In  this  connection  it  should  also  be  remembered  that 
the  city  of  Baltimore  is  especially  interested  in  maintain¬ 
ing  and  increasing  the  gross  receipts  of  the  Company.  In 
addition  to  other  taxes,  the  city  receives  9  per  cent,  of 
the  Company’s  gross  within  the  city  limits.  This  tax, 
known  as  the  Park  Tax,  amounted  in  1912  to  $550,- 
677.01  and  was  equivalent  to  over  eighteen  cents  on  the 
city’s  tax  rate. 

The  United  Company  paid  by  way  of  taxes  and 
indirect  charges  in  1912,  $992,396.67,  which,  for  all 
practical  purposes,  so  far  as  the  Company  is  concerned, 
may  be  considered  as  a  pro-rata  reduction  of  the  fare 
received.  The  above  amount  is  said  to  represent  the 
total  net  earnings  (after  paying  cost  of  operation  only) 
of  about  one  car  in  every  five.  It  is  believed  that  the 
very  fact  that  these  charges  are  now  so  heavy,  constitutes 
an  equitable  and  legal  protection  against  further  increases 
of  taxes  on  the  one  hand  or  any  reduction  of  fares  on 
the  other. 


PUBLIC  SERVICE  COMMISSION. 

The  Company  since  1910  has  been  under  the  super¬ 
vision  of  the  Public  Service  Commission  of  Maryland. 
This  Commission  was  created  by  the  Legislature  with 
extensive  powers  of  control  over  rates,  security  issues, 
service,  etc.  The  Commissioners  have  always  shown  a 
disposition  to  act  with  entire  fairness  in  questions  arising 
between  the  public  and  the  companies  under  their  con¬ 
trol.  The  Company  has  won  most  of  its  cases  before 
the  Commission,  because  the  Company’s  officials  state 


Page  Twenty 


that  they  are  unwilling  to  go  before  the  Commissioners 
with  a  case  in  which  they  have  not  full  confidence.  In  a 
number  of  instances  where  the  appeals  to  the  Commission 
have,  in  the  judgment  of  the  Company,  been  just  ones, 
the  requests  of  the  complainants  have  been  granted  with¬ 
out  resorting  to  a  hearing.  On  the  other  hand,  the  de¬ 
cisions  of  the  Commission  against  the  Company,  while  at 
times  they  have  seemed  somewhat  serious,  have  as  a  rule 
worked  out  very  fairly  to  both  the  Company  and  the 
public.  The  Company  has  never  as  yet  taken  an  appeal 
from  a  decision  of  the  Commission. 

FOR  FURTHER  DESCRIPTION,  PRICES,  ETC., 
UNITED  RAILWAYS  AND  ELECTRIC  COMPANY 
SECURITIES,  including  Underlying  Bonds,  First  Consoli¬ 
dated  4s,  Income  Bonds,  Three-Year  Convertible  Notes, 
Funding  Bonds,  Preferred  and  Common  Stock,  Maryland 
Electric  Railways  Company  Bonds,  Baltimore,  Sparrows 
Point  and  Chesapeake  Guaranteed  Bonds  and  Car  Trusts, 
see  Appendix  II. 


Page  Twenty-One 


APPENDIX 


EARNINGS. — A  comparative  statement  of  the  earn 
the  date  of  the  adoption  of  the  Financial  Plan  for  the 
1912. 


1906. 

1907. 

1908. 

Gross  . 

Operating  Ex- 

$6,587,827.51 

$7,024,586.95 

$6,838,042.27 

penses  . 

3,220,942.27 

3,470,087.37 

3,293,337.71 

Net  Earnings.  .  . 

$3,366,885.24 

$3,554,499.58 

$3,544,704.56 

Taxes  . 

546,507.31 

564,509.86 

600,931 .05 

Balance  available 

for  Interest, 

Dividends,  etc.$2,820,3  77 . 93 

$2,989,989.72 

$2,943,773.51 

Interest  (which 

includes  In- 

terest  on 
Bonded  Debt, 
Rentals,  I  n- 
terest  on  Car 
Trusts,  Inter¬ 
est  and  Dis¬ 
counts)  .... 

1,819,079.35 

1,923,432.42 

2,036,251  .31 

$1,001,298.58 

$1,066,557.30 

$907,522.20 

Interest  on  Income  Bonds — Funded,  1904  to  1910,  inclusive 


*$450,944.1  1  charged  to  Extraordinary  Expenditures  and 
balance  credited  to  Profit  and  Loss. 


Page  Twenty-Two 


I, 


ings  of  the  United  Company  from  the  year  1906 — 
rehabilitation  of  the  property — to  and  including  the  year 


1909. 

$7,212,473.76 

1910. 

$7,690,384.73 

1911. 

$8,028,398.01 

1912. 

$8,577,004.06 

3,361,871  .55 

3,601,895.83 

3,681,093.50 

3,868,875.95 

$3,850,602.21 

650,546.50 

$4,088,488.90 
705,291  .81 

$4,347,304.51 

7  25,558.60 

$4,708,128. 1  1 
796,075.84 

$3,200,055.71 

$3,383,197.09 

$3,621,745.91 

$3,912,052.27 

2,083,641  .44 

2,156,343.55 

2,194,127.06 

2,208,339.13 

$1,116,414.27  $1,226,853.54  $1,427,618.85  $1,703,713.14 


$560,000.00  $560,000.00 


*$867,6 18.85  f$l,143,713 . 14 

f $428, 5 74.47  charged  to  Depreciation;  $38,056.35  Discount 
and  Securities  written  off;  $677,082.32  carried  to  Profit  and  Loss, 
out  of  which  $463,050  was  paid  in  dividends. 


Page  Twenty -Three 


APPENDIX  II. 


Description  of  The  United  Railways  and  Electric  Com¬ 
pany  Securities,  Quotations  (as  of  April  21st, 
1913),  Etc. 

FIRST  CONSOLIDATED  MORTGAGE  FIFTY-YEAR 
4  PER  CENT.  GOLD  BONDS. 

Due  March  1,  1949,  Coupons  Pay- 
lst  Consol.  4s.  able  September  1  and  March  1  at  the 
banking  house  of  Alexander  Brown  & 
Sons.  Continental  Trust  Company  of  Baltimore,  Trustee. 
Total  authorized  issue,  $38,000,000.  Outstanding  in 
hands  of  public,  $28,277,000  (April  21st,  1913). 

FIRST  LIEN  ON  OVER  45  PER 
1st  Lien,  45  Per  CENT.  OF  TRACK. — We  are  advised 
Cent,  of  Track.  that  since  the  issuance  of  these  bonds, 
they  have  become  an  absolute  first 
mortgage,  by  the  retirement  of  underlying  bonds  and  by 
new  extensions,  upon  1  82  miles  of  track  out  of  a  total  of 
403,  or  over  45  per  cent,  of  total  mileage.  This  includes 
56J/2  miles  of  track  formerly  covered  by  the  Baltimore 
City  Passenger  Railway  Company  First  Mortgage  Bonds, 
so  that  the  First  Consolidated  4s  are  now  an  absolute 
lien  on  the  very  heart  of  the  United  Company’s  system. 
It  also  includes  such  new  city  trackage  as  the  Light  Street 
line,  German  Street  line,  the  Lombard  and  Seventh  Street 
connections,  the  Federal  Street,  Fairmount  Avenue,  Fre¬ 
mont  Street,  Wilkens  Avenue,  Dolphin  Street  lines,  the 
double  tracking  of  the  Ellicott  City  line  via  Saratoga  and 
Monroe  streets  and  Edmondson  avenue  to  Ellicott  City, 
and  many  miles  of  valuable  suburban  lines. 


Page  Twenty-Four 


The  First  Consolidated  Mortgage  is 
Car  Shops,  Etc.  also  a  first  lien  upon  the  extensive 
Carroll  Park  car  and  machine  shops, 
upon  the  Pratt  Street  Boiler  House  and  Equipment,  upon 
the  Dugan’s  Wharf,  Nunnery  Lane,  Eastern  Avenue  and 
Harford  Road  sub-stations  and  the  new  Light  Street  car 
house. 

It  is  a  lien  upon  all  the  remaining  property  of  the  Com¬ 
pany  of  every  description  now  owned  and  after  acquired, 
subject  only  to  underlying  liens  amounting  to  $9,050,000, 
First  Consolidated  4  Per  Cent.  Bonds  to  this  amount  are 
held  by  the  Trustee  to  retire  these  underlying  bonds  at 
maturity. 

CLOSED  MORTGAGE— The  First  Con- 
Closed  solidated  Mortgage  is  closed,  except  for 

Mortgage.  refunding  purposes.  The  United  Company, 
however,  has  $2,368,000  bonds  in  its 
treasury  available  for  corporate  purposes,  all  of  which, 
with  the  exception  of  $541,000,  were  certified  against 
the  retirement  of  an  equal  amount  of  underlying  bonds. 
$673,000  of  bonds  are  held  as  collateral  by  the  Trustees 
of  the  Three-Year  Convertible  Notes.  The  remaining 
First  Consolidated  4  Per  Cent.  Bonds  can  only  be  issued 
in  the  future  upon  certificates  to  the  Trustee  that  an 
equal  amount  of  underlying  bonds  have  been  retired. 

These  First  Consolidated  4  Per  Cent. 
Quotations.  Bonds  have  sold  as  low  as  79  and 

as  high  as  102J/2*  Last  sale  84J/4* 


INCOME  4  PER  CENT.  GOLD  BONDS. 

Interest  Payable,  if  earned,  June  1 
Income  Bonds.  and  December  1  at  the  banking  house 
of  Alexander  Brown  &  Sons.  Bonds 
dated  March  30,  1899.  Payable  at  option  of  Corn- 


Page  Twenty-Five 


pany  after  March  1,  1949.  Maryland  Trust  Company 
of  Baltimore,  Trustee.  Total  authorized  issue,  $14,- 
000,000.  Outstanding,  $13,976,000. 

MORTGAGE  LIEN.— Of  the  $  14,- 
Mortgage  Lien.  000,000  of  Preferred  Stock  (originally 
issued)  all  but  $24,000  has  been  ex¬ 
changed  for  Income  Mortgage  4  Per  Cent.  Gold  Bonds. 
These  bonds  are  secured  by  a  mortgage  covering  all  the 
property  of  the  United  Company  subject  to  its  First  Con¬ 
solidated  Mortgage  and  Underlying  Bonds.  (See  Post, 
Title  “Funding  Bonds.”)  The  interest  on  these  bonds  is 
payable,  if  earned,  pari  passu  with  the  dividends  on  out¬ 
standing  Preferred  Stock  in  equal  semi-annual  instalments 
on  the  first  days  of  June  and  December  out  of  “net  earn¬ 
ings  of  the  Company  realized  and  remaining  in  any  one 
year  after  the  payment  of  all  taxes,  operating  expenses, 
necessary  repairs  and  maintenance  and  interest  upon  its 
bonded  indebtedness.”  The  interest 
Cumulative.  is  cumulative.  The  principal  of  the 

bonds  is  payable  at  the  option  of  the 
Company  after  March  1,  1949.  The  principal  may  be 
declared  due  and  payable  upon  a  default  in  principal  or 
interest  of  the  First  Consolidated  4s  or  underlying  bonds, 
whereby  the  principal  of  said  consoli¬ 
dated  mortgage  bonds  shall  become 
due  and  payable. 

PROPERTIES. — For  a  description 
of  the  properties  on  which  these  bonds 
are  a  lien,  see  Memoranda  of  the  lien 
of  the  First  Mortgage  4s  (ante). 

CLOSED  MORTGAGE.— This  mort¬ 
gage  is  a  closed  mortgage,  the  total 
authorized  issue  being  now  outstanding 
with  the  exception  of  $24,000  held  to 
exchange  for  preferred  stock. 


Maturity. 


Property 

Covered. 


Closed 

Mortgage. 


Page  Twenty-Six 


PAYMENT  OF  COUPONS— The 
Coupons — How  income  interest  on  these  bonds,  pay- 
and  When  Paid,  able  if  earned,  was  paid  in  cash  from 
the  time  of  consolidation  until  June  1 , 
1904,  when,  following  the  great  fire  of  that  year,  the 
Company  passed  the  income  coupons  of  that  date.  This 
policy  was  continued  until  the  adoption  of  the  Company's 
financial  plan  in  October,  1906,  whereby  the  interest  w as 
funded  from  1904  to  1910,  inclusive. 

The  whole  surplus  income  of  the  Company  was 
devoted  during  this  period  to  a  rehabilitation  of  the 
system.  While  this  policy  resulted  in  a  temporary  hard¬ 
ship  upon  the  holders  of  these  bonds  it  added  greatly  to 
their  security  and  the  earning  capacity  of  the  Company. 

In  1911  the  Company  resumed  payment  of  interest  on 
these  bonds  and  in  1912  the  Company,  after  all  expenses 
and  charges,  including  depreciation,  earned  about  twice 
the  interest  on  these  bonds. 

The  Income  Bonds  have  sold  as  low 
Quotations.  as  41%  and  as  high  as  86.  Last 

sale  64%. 


PREFERRED  STOCK. 

The  Company  originally  authorized 
Preferred  Stock.  $14,000,000  4  per  cent.  Preferred 
Stock,  but  shortly  after  its  issue  author¬ 
ized  $14,000,000  of  Income  Bonds  with  which  to  retire 
the  Preferred  Stock.  All  but  $24,000  of  the  stock  has 
been  retired.  The  stock  is  therefore  seldom  quoted; 
when  it  is,  it  is  on  a  basis  of  prevailing  market  rates  for 
Income  Bonds. 


Page  Twenty- Seven 


COMMON  STOCK. 


There  is  now  $19,568,800  outstand- 
Common  Stock,  ing  (April  21st,  1913.)  The  United 
Company  began  paying  dividends  on 
its  common  stock  in  1912,  the  amount  paid  that  year 
being  3  per  cent. 

To  stockholders  of  record  April  11,  1913,  a  dividend 
of  $1.00  a  share  was  declared.  This  is  at  the  rate  of 
4  per  cent,  per  annum. 

The  Common  Stock  has  sold  as  low  as  8  and  as  high 
as  27%.  Last  sale  26. 


THREE- YEAR  5  PER  CENT.  COLLATERAL  TRUST 
CONVERTIBLE  NOTES. 

Due  July  15,  1914.  Coupons  payable  January  15 
and  July  1  5  at  the  banking  house  of  Alex.  Brown  &  Sons. 
Safe  Deposit  and  Trust  Company  of  Baltimore,  Trustee. 
Redeemable  at  par  and  accrued  interest  upon  sixty  days’ 
notice.  Total  authorized  issue,  $3,125,000,  of  which  all 
but  $840,600  have  been  converted  into  common  stock. 
(April  21st,  1913.) 

These  Notes,  which  were  issued  with  the  approval  of 
the  Public  Service  Commission  of  Maryland,  are  the 
direct  and  unconditional  obligation  of  the  United  Rail¬ 
ways  and  Electric  Company  and  are  secured  by  Trust 
Agreement,  dated  July  15,  1911. 

They  were  also  secured  by  deposit  of  $2,500,000 
First  Consolidated  Mortgage  4  Per  Cent.  Bonds,  which, 
under  the  indenture  securing  the  Notes,  the  Company 
reserved  the  right  to  withdraw  proportionately  as  the 
Notes  were  paid  or  converted  into  common  stock. 


Page  Twenty- Eight 


The  Notes  were  further  secured  by  a  deposit  of 
$6,250,000  par  value  of  common  stock  of  the  United 
Company  with  the  Trustee  as  collateral  for  the  Notes  and 
for  purposes  of  conversion. 

The  Notes  are  convertible  at  any  time  up  to  and 
including  January  2,  1914  (unless  called  for  redemption) 
into  shares  of  the  common  stock  of  the  Company  at  $25 
per  share  (par  $50.)  Five  days’  notice  of  the  intention 
to  convert  must  be  given  to  the  Company  in  writing,  but 
the  Company  has  heretofore  waived  this  notice.  By 
April  21st,  1913,  the  holders  of  $2,284,000  of  these 
notes  had  availed  themselves  of  the  right  of  conversion. 

The  Notes  were  issued  for  the  purpose  of  retiring 
$2,000,000  Baltimore  City  Passenger  Railway  Company  5 
Per  Cent.  Bonds  and  $500,000  Baltimore  City  Passenger 
Railway  Company  4J/2  Per  Cent.  Certificates  of  Indebted¬ 
ness,  both  maturing  November  2,  1911,  and  the  redemp¬ 
tion  on  October  1 ,  1  9  1  1 ,  of  the  then  unmatured  $535,000 
Car  Trust  Certificates,  Series  B  and  C. 

Any  number  of  the  above  Notes  may  be  called  for 
redemption  at  any  time  or  times  upoil  the  giving  of  at 
least  sixty  days’  notice,  in  which  case  the  principal  of  the 
Notes  so  called,  will  be  payable,  with  the  interest  accrued, 
on  the  date  named  in  said  notice,  unless  the  holder  shall 
elect  to  convert  the  principal  into  common  stock,  but  the 
right  to  convert  the  principal  of  the  Notes  called,  into  the 
common  stock  of  the  Company  will  cease  five  (5)  days 
prior  to  the  date  named  in  said  notice  for  the  payment 
thereof.  In  the  event  that  it  is  determined  at  any  time 
by  the  Company  to  call  for  redemption  a  part  only  of 
said  Notes,  the  Notes  so  to  be  called  will  be  determined 
by  lot. 


Page  Twenty-Nine 


Quotations. 


These  Notes  have  sold  as  high  as 
110J/4  and  as  low  as  98 5/2-  Last 
sale  105. 


FIVE  PER  CENT.  THIRTY- YEAR  FUNDING  BONDS. 

Due  June  1,  1936.  Coupons  pay- 
Funding  Bonds,  able  June  1  and  December  1 .  Mary¬ 
land  Trust  Company,  Trustee.  Inter¬ 
est  payable  at  the  banking  house  of  Alexander  Brown  & 
Sons.  Redeemable  at  any  interest  date  at  par  and 
accrued  interest.  Total  authorized  issue,  $3,920,000. 
Outstanding,  $3,920,000. 

These  bonds  are  not  secured  by 
Fixed  Charge.  mortgage,  but  are  the  unconditional 
obligation  of  the  United  Company  to 
pay  principal  and  interest  semi-annually  on  the  above 
dates,  and  are  secured  by  agreement,  dated  July  25, 
1906.  They  were  created  and  issued  for  the  purpose 
of  paying  the  interest  warrants  or  coupons  upon  income 
bonds  from  1904  to  1910,  inclusive.  (See  Ante,  p.  27.) 
They  are  in  denominations  of  $1,000,  $500  and  $100. 

The  priority  of  interest  on  these  bonds 
Priority  to  to  interest  on  the  income  bonds  is 

Incomes.  ensured  by  the  fact  that  all  income 

bonds  deposited  under  the  funding 
plan,  amounting  to  $13,842,000  out  of  a  total  outstand¬ 
ing  issue  of  $13,976,000  have  consented  to  such  priority 
and  a  memorandum  of  agreement  to  that  effect  has  been 
stamped  upon  the  bonds  and  all  coupons. 

These  bonds  have  sold  as  low  as 
Quotations.  6  7  J/4  and  as  high  as  9 1 .  Last  sale  8  7  Yl . 


Page  Thirty 


THE  MARYLAND  ELECTRIC  RAILWAYS  COM- 
PANY  FIRST  MORTGAGE  FIVE  PER  CENT. 
TWENTY-FIVE-YEARGOLD  SINK¬ 
ING  FUND  BONDS. 

Dated  September  15th,  1906. 

Maryland  Electric  Mercantile  Trust  and  Deposit  Corn- 
Railways  Com-  pany  of  Baltimore,  Trustee.  Interest 
pany  First  5s.  payable  at  the  banking  house  of 

Alexander  Brown  &  Sons  April  1 
and  October  1.  Total  authorized  issue,  $8,000,000; 
outstanding,  $4,000,000.  Redeemable  at  1  1 0  and  ac¬ 
crued  interest. 

The  Maryland  Electric  Railways 
Company.  Company  was  formed  by  the  consoli¬ 

dation  August  6,  1906,  of  the  Mary¬ 
land  Electric  Railway  Company  and  the  Baltimore  and 
Annapolis  Short  Line,  which  latter  owned  and  operated 
a  line,  since  electrified,  between  Baltimore  and  Annapolis, 
Md. — twenty-two  miles. 

The  Maryland  Electric  Railways 
Security.  Company  First  5  Per  Cent.  Bonds  were 

issued  after  the  above  consolidation 
and  are  a  first  mortgage  upon  real  estate,  car  houses, 
power  sub-stations,  excursion  parks,  extensions  and 
equipment  acquired  with  the  proceeds  of  said  bonds  and 
leased  to  the  United  Company  under  a  rental  agreement 
whereby  the  latter  Company  obligates  itself  to  pay  an 
annual  net  rental  of  6  per  cent,  on  the  cost,  which  is  more 
than  sufficient  to  pay  interest  on  the  bonds,  and  since 
March  30th,  1910,  1  Yl  Per  cent,  per 
Sinking  Fund.  annum  additional  as  a  sinking  fund. 

The  United  Company  also  pays  to  the 
Special  Sinking  Fund  7J/2  per  cent,  of  the  cost  each  year 


Page  Thirty-One 


of  equipment  purchased  with  the  bond  proceeds  and 
Special  Sinking  Fund  until  the  equivalent  of  the  full  pur¬ 
chase  price  of  the  equipment  is  paid. 

The  United  Company  pays  all  the  cost  of  maintenance, 
operation,  taxes,  insurance,  etc.,  and  agrees  to  purchase 
the  property  at  maturity  of  or  upon  any  default  on  the 
bonds  at  a  sum  sufficient  to  retire  them. 

The  Maryland  Electric  Railways  Company  First  Mort¬ 
gage  Bonds  are  therefore  secured: 

(a)  By  a  first  mortgage  upon  the  property  described. 

(b)  By  the  leasing  agreement  of  The  United  Company  and  its 
obligation  to  purchase  the  property  at  maturity  of  the  bonds  or 
upon  any  default  thereon. 

(c)  By  the  Sinking  Funds  referred  to. 

(d)  By  the  obligation  of  The  Maryland  Electric  Railways  Com¬ 
pany  owning  the  Annapolis  Short  Line  property. 

These  bonds,  in  our  opinion,  should 
Character  of  be  regarded  as  high  grade  equipment, 
Security.  rather  than  as  ordinary  mortgage  rail¬ 

way  bonds.  They  are  a  first  mortgage 
upon  very  valuable  property  including  real  estate,  and 
their  principal  security  lies  in  the  fact  that  they  represent 
the  ownership  of  property,  which,  in  the  judgment  of 
operating  officials,  is  necessary  for  the  economical  and 
efficient  operation  of  the  United  Company’s  system. 
Proportioned  to  the  value  of  the  whole  property  of  the 
United  Company,  or  even  the  amounts  spent  upon  it  in 
the  past  few  years,  the  present  issue  of  these  bonds  is 
very  small  ($4,000,000)  and  the  rental  charges  are  not 
heavy. 

We  are  sometimes  asked  to  compare  the  First  Consoli¬ 
dated  4s  of  the  United  Company  with  the  First  Mortgage 
Bonds  of  the  Maryland  Electric  Railways  Company,  but 


Page  Thirty-Two 


the  two  issues  are  so  essentially  different  in  character  of 
security  that  this  cannot  fairly  be  done.  It  would  be 
just  as  fair  to  compare  the  security  of  the  First  Consoli¬ 
dated  Mortgage  Bonds  of  a  railroad  with  its  equipment 
bonds. 

These  Maryland  Electric  Railways 
Quotations.  Company  bonds  have  sold  as  low  as 

94%  and  interest,  and  as  high  as  99% 
and  interest.  Last  sale  98%. 


THE  BALTIMORE,  SPARROWS  POINT  AND  CHESA¬ 
PEAKE  RAILWAY  COMPANY  FIRST  MORTGAGE 
FIFTY-YEAR  4%  PER  CENT.  GOLD  BONDS. 

Due  February  1,  1953.  Coupons 
B.  S.  P.  &  C.  payable  at  the  banking  house  of  Alex. 
First  4V2S.  Brown  &  Sons  February  1  and  August 

1 .  Fidelity  Trust  Company  of  Balti¬ 
more,  Trustee.  Guaranteed  Principal  and  interest  by 
The  United  Railways  and  Electric  Company  of  Balti¬ 
more.  Total  authorized  issue,  $2,000,000.  Outstand¬ 
ing,  $2,000,000. 

The  mortgage  is  a  first  lien  upon  the 
Security.  lines  of  the  above  Company,  extending 

from  the  eastern  city  limits  to  the  inter¬ 
section  of  Eastern  Avenue  (extended)  and  Middle  River; 
and  from  the  intersection  of  Eastern  Avenue  and  the  Old 
Trappe  Road  to  the  terminus  at  North  Point,  passing 
Sparrows  Point,  a  thriving  town  and  home  of  the  Mary¬ 
land  Steel  Company.  Since  the  date  of  the  mortgage 
the  Company  has  built  a  double  track  extension  to  Bay 
Shore  Park,  on  which  extension  the  mortgage  has  become 
a  first  lien. 


P««e  Thirty-Three 


The  mortgage  is  also  a  lien  upon 
Guaranteed  by  all  other  property  and  franchises  of 
United  Railways,  the  Company  acquired  or  to  be  ac¬ 
quired. 

The  whole  of  the  property  is  leased  to  the  United 
Company,  which  operates  it  and  guarantees  the  bonds. 
The  lease  is  part  security  for  the  mortgage. 

The  mileage  at  present  is  thirty-five  of  single  track. 

These  bonds  have  sold  as  low  as  85 
Quotations.  and  as  high  as  99J/2-  Last  sale  95  J4* 


UNDERLYING  BONDS. 

CENTRAL  RAILWAY  COMPANY 
Consolidated  5s.  CONSOLIDATED  MORTGAGE  5 
PER  CENT.  GOLD  BONDS.  Due 
May  1,  1932.  Coupons  payable  May  1  and  November 
1  at  Merchants-Mechanics  National  Bank.  Mercantile 
Trust  and  Deposit  Company  of  Baltimore,  Trustee. 
Total  authorized  issue,  $700,000.  Outstanding,  Decem¬ 
ber  31,  1912,  $700,000. 

They  are  a  first  mortgage  on  the  old 
Security.  Central  Railway  Company  property, 

covering  principally  the  Preston  Street 
line,  the  City  Hall,  Canton  and  Belair  Road  divisions 
about  36J/2  miles  of  single  track. 

These  bonds  were  issued  to  retire  underlying  bonds 
(since  retired)  and  for  purposes  of  electrifying  the  road. 

Quotation.  Last  sale,  104J/2. 


Page  Thirty-Four 


IBID.  “EXTENSION  AND  IM- 
Extension  and  PROVEMENT”  5  PER  CENT.  GOLD 
Improvement  5s.  BONDS.  Due  March  1,  1  932.  Cou¬ 
pons  payable  March  1  and  September 
1  at  Merchants-Mechanics  National  Bank.  Baltimore 
Trust  Company,  Trustee.  Total  authorized  issue, 
$600,000.  Outstanding,  $600,000. 

These  bonds  cover  all  property  of 
Security.  the  Company  except  the  line  from 

Druid  Hill  Park  to  foot  of  Broadway 
viz:  Belair  Road,  Wolfe  Street  and  Canton  lines. 

Quotation.  Last  sale,  1 06. 

CITY  AND  SUBURBAN  RAIL- 
City  and  Suburban  WAY  COMPANY  FIRST  MORT- 
First  5s.  GAGE  5  PER  CENT.  GOLD 

BONDS.  Due  June  1,  1922.  Cou¬ 
pons  payable  June  1  and  December  1  at  the  banking 
house  of  Alexander  Brown  &  Sons.  Safe  Deposit  and 
Trust  Company  of  Baltimore,  Trustee.  Total  authorized 
issue,  $3,000,000.  Outstanding,  $3,000,000. 

These  bonds  are  a  first  mortgage  on 
Security.  the  old  City  and  Suburban  Railway 

Company’s  property  covering  princi¬ 
pally  the  following  lines:  Maryland  Avenue,  Roland 
Park  and  Highlandtown,  John  Street  and  Columbia 
Avenue,  Pratt  Street,  Lombard  Street,  York  Road,  North 
Avenue — about  forty-four  miles  of  single  track. 

Quotation.  Last  sale,  103. 

BALTIMORE  TRACTION  COM- 
Baltimore  Traction  PANY  FIRST  MORTGAGE  5  PER 
First  5s.  CENT.  BONDS.  Due  November  1 , 

1929.  Coupons  payable  May  1  and 


Page  Thirty-Five 


November  1  at  Merchants-Mechanics  National  Bank. 
Mercantile  Trust  and  Deposit  Company  of  Baltimore, 
Trustee.  Total  authorized  issue,  $1,500,000.  Out¬ 
standing,  $1,500,000. 

These  bonds  are  a  first  mortgage 
Security.  upon  the  old  Baltimore  Traction  Com¬ 

pany  system,  covering  principally  the 
following  lines:  Druid  Hill  Avenue,  Gilmor  Street, 
Carey  Street,  Pikesville,  Gwynn  Oak,  Westport,  Curtis 
Bay,  West  Arlington — about  thirty- two  miles  of  single 
track. 

Quotation.  Last  sale,  1041/2. 

IBID.  “NORTH  BALTIMORE 
North  Baltimore  DIVISION”  FIRST  MORTGAGE  5 
Division  5s.  PER  CENT.  GOLD  BONDS.  Due 

June  1 ,  1 942.  Coupons  payable 
December  1  and  June  1  at  Merchants-Mechanics  National 
Bank.  Mercantile  Trust  and  Deposit  Company  of  Balti¬ 
more,  Trustee.  Total  authorized  issue,  $  1 , 750,000.  Out¬ 
standing,  $1,750,000. 

These  bonds  are  a  first  mortgage  on 
Security.  the  old  North  Baltimore  Passenger 

Railway  Company  lines  and  those  of 
the  Baltimore  and  Powhatan  Railway  Company,  covering 
about  twenty-one  miles  of  single  track  on  Linden  Avenue, 
Fremont  Street,  Edmondson  Avenue  and  Monument 
Street,  Waverly  line  from  Charles  and  Twenty-fifth 
Streets  to  York  Road  and  Thirty-first  Street,  and  on 
Twenty-fifth  Street,  from  St.  Paul  Street  to  York  Road. 

Quotation.  Last  sale,  ]06%. 


Page  Thirty-Si* 


LAKE  ROLAND  ELEVATED 
Lake  Roland  First  RAILWAY  COMPANY  FIRST 
Consolidated  5s.  CONSOLIDATED  MORTGAGE  5 

PER  CENT.  GOLD  BONDS.  Due 
September  1,  1942.  Coupons  payable  March  1  and 
September  1  at  the  banking  house  of  Alexander  Brown 
&  Sons.  Baltimore  Trust  Company,  Trustee.  Total 
authorized  issue,  $1,000,000.  Outstanding,  $1,000,000. 

These  bonds  are  a  lien  upon  all  the 
Security.  property  of  the  old  North  Avenue 

Railway  Company  and  the  Baltimore, 
Hampden  and  Lake  Roland  Railroad  Company,  covering 
eighteen  miles  of  single  track  on  North  Avenue,  from 
Walbrook  to  Division  Street;  McCulloh  Street  to  Madison 
Avenue;  John  Street  to  McMechen  Street  on  North 
Avenue;  North  Avenue  to  Lexington  Street  on  Guilford 
Avenue;  North  to  Charles  Street  on  Lexington  Street. 

Quotation.  Last  sale,  105%. 

BALTIMORE,  CATONSVILLE  AND 
B.  C.  &  E.  M.  ELLICOTT’S  MILLS  RAILWAY  COM- 
First  5s.  PANY  FIRST  MORTGAGE  5  PER 

CENT.  BONDS.  Due  July  1,  1916. 
Coupons  payable  January  1  and  July  1  at  Merchants- 
Mechanics  National  Bank.  Safe  Deposit  and  Trust 
Company  of  Baltimore,  Trustee.  Total  authorized  issue, 
$500,000.  Outstanding,  $500,000. 

These  bonds  are  a  first  lien  upon  all 
Security.  the  property  of  the  above  old  Company, 

covering  principally  eleven  miles  of 
track,  running  from  Frederick  Avenue  near  Mount  Street 
and  continuing  over  Frederick  Road  to  Catonsville. 

Quotation.  Last  sale,  101%. 


Page  Thirty-Seven 


4 


V 

CAR  TRUSTS. 

THE  UNITED  RAILWAYS  AND 
Car  Trusts  ELECTRIC  COMPANY  CAR  TRUST, 

Series  A.  SERIES  “A,”  5  PER  CENT.  BONDS. 

Dated  October  1,  1904.  Due  in  ten 
annual  instalments  of  $35,000  each,  beginning  October  1, 

1905.  Interest  payable  April  1  and  October  1.  Fidelity 
Trust  Company  of  Maryland,  Trustee.  Total  issue, 

$350,000.  Secured  by  150  closed  cars,  2  sprinklers  and 
equipment,  costing  $411,510.  Outstanding  December 
31,  1912,  $70,000. 


The  above  Certificates  are  selling  on 
Quotation.  about  a  5  per  cent,  basis. 

NOTE. — Car  Trusts,  Series  B  and  C  were  redeemed  on 
October  1,  1911,  $535,000  at  102J/2  and  interest. 

We  have  obtained  the  within  information  from  various 
publications  and  from  the  statements  of  the  Company  and 
its  officers.  While  we  believe  the  information  to  be 
entirely  reliable,  it  is  compiled  by  us  as  a  convenient 
reference  and  we  assume  no  responsibility  in  connection 
therewith. 


Page  Thirty- Eight 


j 


